fDeath is a part of life, yet many people don't consider the fact that when the Reaper comes knocking, their loved ones will be left behind. Providing support for your family in the form of life assurance can help in the most difficult times by easing any financial worries they may otherwise have.
The most common reasons to take out a life insurance policy are:
Mortgage payments
If you have an outstanding balance on your home, a life insurance policy could take care of this, ensuring your family won't be made homeless, thus adding to the grief.
Income replacement
If you are the main wage earner, a life insurance policy could replace the income you would otherwise have made, avoiding financial hardship for your family.
Childcare support
If your partner is left alone with small children, life insurance can provide the money to pay for necessary childcare.
Education
A life inssurance policy can help provide the fees for your child's education at school or university.
There are as many different types of life cover as there are reasons to have it. It can be confusing, so if you're unsure about which would suit you it's best to compare different policies and seek further advice before deciding. Here's a summary of the most common types of policy:
Level Term Assurance
This type of policy is taken over a fixed term and pays out a lump sum if the policy holder dies during that term. The sum payable remains guaranteed throughout.
Decreasing Term Insurance
Similar to Level Term in that the policy is over a fixed length of time, but the sum decreases over the duration of the policy. Commonly used to protect mortgage interest repayments.
Convertible Term Assurance
The same as Level Term, but with an option to convert to a Whole of Life or Endowment insurance policy.
Whole of Life Insurance
Guarantees a lump sum on the policy holder's death, provided payments are maintained. Does not run out, and premiums are fixed for the first ten years.
Endowment Life Insurance
This type of policy takes your premiums and invests them in the stock market, and pays out the returns upon the end of the term or the death of the policy holder, whichever comes first. It can be a tremendous asset to someone who understands stocks and shares.
Family Income Insurance
As the name suggests, this policy will help out widows or widowers with a family to support. Rather than a single lump sum, this policy pays out the sum in the form of regular monthly payments. Payments last for however long is left on the term at the time of death.
Some life insurance policies come with additional benefits such as critical illness cover; a sum is payable should you be diagnosed with certain illnesses like kidney failure, cancer or Parkinson's Disease. You may also be offered a waiver of premiums; a form of PPI which will continue to pay your premiums if you cannot work for health reasons.
As with all insurance policies, life insurance should not be rushed into. It's important to understand exactly what you're signing and paying for, and any exclusions which may apply. Some policies will not result in a payout if death occurs due to a pre-existing condition, or one which was known about and not declared when the policy was taken out. Others refuse to pay out for deaths caused by undertaking dangerous activities such as extreme sports.
Protect your family with a life insurance policy. Taking out a Level Term Assurance or even a Whole of Life Assurance policy can help your nearest and dearest through the hardest times.
Source: EzineArticles.com/?expert=Jay_Tillotson
The most common reasons to take out a life insurance policy are:
Mortgage payments
If you have an outstanding balance on your home, a life insurance policy could take care of this, ensuring your family won't be made homeless, thus adding to the grief.
Income replacement
If you are the main wage earner, a life insurance policy could replace the income you would otherwise have made, avoiding financial hardship for your family.
Childcare support
If your partner is left alone with small children, life insurance can provide the money to pay for necessary childcare.
Education
A life inssurance policy can help provide the fees for your child's education at school or university.
There are as many different types of life cover as there are reasons to have it. It can be confusing, so if you're unsure about which would suit you it's best to compare different policies and seek further advice before deciding. Here's a summary of the most common types of policy:
Level Term Assurance
This type of policy is taken over a fixed term and pays out a lump sum if the policy holder dies during that term. The sum payable remains guaranteed throughout.
Decreasing Term Insurance
Similar to Level Term in that the policy is over a fixed length of time, but the sum decreases over the duration of the policy. Commonly used to protect mortgage interest repayments.
Convertible Term Assurance
The same as Level Term, but with an option to convert to a Whole of Life or Endowment insurance policy.
Whole of Life Insurance
Guarantees a lump sum on the policy holder's death, provided payments are maintained. Does not run out, and premiums are fixed for the first ten years.
Endowment Life Insurance
This type of policy takes your premiums and invests them in the stock market, and pays out the returns upon the end of the term or the death of the policy holder, whichever comes first. It can be a tremendous asset to someone who understands stocks and shares.
Family Income Insurance
As the name suggests, this policy will help out widows or widowers with a family to support. Rather than a single lump sum, this policy pays out the sum in the form of regular monthly payments. Payments last for however long is left on the term at the time of death.
Some life insurance policies come with additional benefits such as critical illness cover; a sum is payable should you be diagnosed with certain illnesses like kidney failure, cancer or Parkinson's Disease. You may also be offered a waiver of premiums; a form of PPI which will continue to pay your premiums if you cannot work for health reasons.
As with all insurance policies, life insurance should not be rushed into. It's important to understand exactly what you're signing and paying for, and any exclusions which may apply. Some policies will not result in a payout if death occurs due to a pre-existing condition, or one which was known about and not declared when the policy was taken out. Others refuse to pay out for deaths caused by undertaking dangerous activities such as extreme sports.
Protect your family with a life insurance policy. Taking out a Level Term Assurance or even a Whole of Life Assurance policy can help your nearest and dearest through the hardest times.
Source: EzineArticles.com/?expert=Jay_Tillotson
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